ERISA, Insurance Bad Faith

When you submit a claim for disability insurance benefits, you expect that the insurance company will quickly approve your claim.  Why wouldn’t they provide the disability benefits you diligently paid for?  You are unable to work due to an injury or sickness and have a diagnosis, symptoms, and limitations.  You are a hard, honest worker, and if you could work, you would.  And yet, all too often, insurance companies deny valid claims, leaving insureds without the income replacement they were counting on to pay the bills while they are unable to work.

When a claim is denied, your obvious next step is to find a lawyer and sue the insurance company.  Unfortunately, that is not always immediately an option.  If your insurance was provided by your employer, it is most likely governed by a series of laws called the Employee Retirement Income Security Act of 1974, or as they are more commonly known—ERISA.  Under ERISA, an insured is not allowed to sue the insurance company right away, instead, they must file an appeal with the same insurance company, asking them to overturn the denial decision. What is even worse is that the insurance company does not tell you how important the appeal process is should there be any future litigation.  ERISA is very favorable to insurance companies.  For example, under policies governed by ERISA, claimants are not entitled to bad faith damages, punitive damages or even future benefits if the insurer wrongfully denies a claim.  There is no jury trial.  If an insurance company loses an ERISA lawsuit, all they have to pay are back benefits and possibly interest and attorneys’ fees, depending on how the Court rules.  

Another insurer-friendly feature of ERISA is that, in litigation, with a few, very limited exceptions, the Court is only allowed to review and consider documents that were provided to the insurance company during the claim and appeal process.  That means if you handle your own appeal and don’t hire an attorney until after the final denial decision, your attorney cannot ensure a vocational review, functional capacity evaluation or any other report that would help your claim.  You will be stuck with records you sent to the insurance company, and nothing else.  

For this, and other reasons, Donahue & Horrow LLP recommend that you retain our firm to assist you in your appeal.  With decades of experience litigating ERISA claims, the attorneys at Donahue & Horrow LLP know exactly what information needs to be provided to the insurance company during your appeal. 

In fact, on many occasions, Donahue & Horrow LLP has even been able to convince the insurance company to overturn their decision on appeal, allowing our client to receive long-term disability benefits without having to resort to time-consuming litigation.

For example, we were recently able to convince Lincoln National Life Insurance Company to reverse its decision to deny an accountant’s claim for long-term disability (LTD) benefits.  In the appeal letter, Donahue & Horrow LLP provided a highly detailed summary of the medical records and highlighted the numerous errors in the insurer’s decision.  The firm also commissioned a Labor Market Survey and gathered statements from the claimant and her family to support the appeal.

Similarly, after receiving a 36-page appeal letter from Donahue & Horrow LLP that included 200 pages of exhibits, Unum Life Insurance Company of America reversed its claim decision and approved our client’s claim for long-term disability benefits.  As part of the appeal, Donahue & Horrow LLP ensured that our client’s appeal included a Functional Capacity Evaluation, which was instrumental in getting the claim denial overturned.  

Also, following an appeal letter from Donahue & Horrow LLP, Lincoln National Life Insurance Company reversed its decision to deny a nurse clinician’s claim for LTD benefits.  Once again, the appeal included the results of a Functional Capacity Evaluation, a Vocational Report with a Labor Market Survey, detailed letters from the claimant, her family and former co-workers, as well as a summary of the medical records that supported the claim.

In disability claims that are governed by ERISA, the appeal is the most important pre-litigation event as it is the final chance to introduce evidence that can be used at trial.  It is therefore imperative that your appeal be handled by someone who understands ERISA and has experience litigating those types of cases.  If you believe that your ERISA-governed disability insurance claim was improperly denied by your insurance company, call Donahue & Horrow LLP today at (877) 664-5407 for a free consultation.